IFC s Climate Business

Size: px

Start display at page:

Download "IFC s Climate Business"

Abel Griffin
6 years ago
Views:

1 IFC s Climate Business Doing Business at IFC in a Climate-Smart Way Financing Energy Efficiency CIF Partnership Forum June 2014

2 Agenda Introducing IFC IFC s Blended Finance Financing Resource Efficiency EE Leasing Program in Turkey 2

1956 More than half of IFC s ~4,000 staff

3 IFC is the largest development bank focused solely on the private sector Main driver of private sector development in the World Bank Group Profitable since 1956 More than half of IFC s ~4,000 staff work in field offices More than 100 offices in 95 countries We create opportunity for people to escape poverty and improve their lives 3

4 IFC has three main businesses lines Loans Equity Investment Services Trade finance Syndications Securitized finance Blended finance Advisory Services Access to finance Sustainable Business Investment Climate Public-Private Partnerships IFC Asset Management Company Wholly owned subsidiary of IFC Private equity fund manager Invests third-party capital alongside IFC $18.3 B new commitments in FY13 >$200 m per year $4.5 B under mgmt 14% in climate in FY13 23% in climate in FY12 Catalyst Fund 4

$1,001 $14 $479 $357 $8 $212 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 60 50

5 IFC Climate Business Historic Volumes Commitments: IFC own account ($US millions) $2,500 $2,000 $1,500 $1,000 $500 $0 $2,509 $53 $1,665 $1,671 $1,624 $30 $26 $984 $1,001 $14 $479 $357 $8 $212 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY Advisory Spend ($US millions) Investment Commitments Advisory Spend 5

6 IFC has committed to three bold targets by FY15 Investment 20% of LTF and 10% of STF ~$3 billion Climate commitments in FY15 Advisory 23% of advisory spend Impact GHG reductions 6

7 IFC is engaged in 3 key areas of climate business Clean Energy & Energy Access Resource Efficiency Climate Adaptation Enabling environment PPP advice RE through FIs RE Component Manufacturing On-grid and off-grid generation Clean energy access Macro environment and sector studies Utilities & demandside management EE equipment Industrial processes Green Buildings EE through FIs and new business models Risk assessment practices and sector studies Operationalizing risk assessment Pilot Program for Climate Resilience Adaptation investments Innovation & Mobilizing Climate Finance 7

8 Climate business spans all 6 IFC regions IFC Climate Business Commitments FY05-13: $10.5 B Europe and Central Asia 27% Latin America and the Caribbean 25% South Asia 14% East Asia and the Pacific 21% Sub- Saharan Africa 9% Middle East and North Africa 3% WORLD 1% 8

9 IFC s approach to moving climate markets Improving the Enabling Environment Demo Investments Case Study: Albania Hydro Setting New Standards Case Study: CSP in South Africa Charting New Territory Case Study: EDGE Green Building Program Deploying Blended Finance Case Study: Modern Karton Helping Innovators as They Grow Case Study: Takoradi Plant Financial Innovation Channeling New Sources of Capital Case Study: Attero Recycling Case Study: Global Irrigation Program Case Study: 9 Green Bonds 9

IFC utilizes blended finance to catalyze

Finance + IFC Investment Objectives Catalyze

Demonstration effect Process Blend donor

targeted, & strategic Results Total project

7 B Examples: Lower interest / longer tenor

10 IFC utilizes blended finance to catalyze investments Blended Finance = Concessional Finance + IFC Investment Objectives Catalyze investments Address market barriers Demonstration effect Process Blend donor funds with IFC investments Disciplined, targeted, & strategic Results Total project size of $3.7 B Examples: Lower interest / longer tenor debt Blended with $1,040 M in IFC financing First loss guarantees $240 M in concessional funds 10

Notable Resource Efficiency Projects Ukraine Agriculture $5 M loan to Mriya through CPLF Turkey Green

Advisory engagement enabled $52 M of IFC investment, $206 M total China EE through Banks CHUEE program

Investments in green lowincome housing and hospital Ghana Utility Efficiency $120M loan to TICO,

Shouren (furnace efficiency) - $8 M Tianjin Haitai (green asphalt) - $9 M Latin America Funds: 2 funds

11 Notable Resource Efficiency Projects Ukraine Agriculture $5 M loan to Mriya through CPLF Turkey Green Leasing $50 M credit line to Yapi Kredi for energy efficient leasing Russia Resource Efficiency Program Advisory engagement enabled $52 M of IFC investment, $206 M total China EE through Banks CHUEE program provided over $800 M in loans for over 170 EE/RE projects China - Cleantech Mexico Green Buildings Investments in green lowincome housing and hospital Ghana Utility Efficiency $120M loan to TICO, structured with blended finance India Water Efficiency Advisory cooperation with Tata industries Shouren (furnace efficiency) - $8 M Tianjin Haitai (green asphalt) - $9 M Latin America Funds: 2 funds - $35 M India Cleantech Equity in Ecolibrium (industrial systems), Kalkitech (smart grid), and Attero (e waste recycling) 11

12 Specifics of Energy Efficiency Investments Boring energy efficiency is the biggest carbon-cutting tool International Energy Agency Multifaceted Big Push Programmatic approach 12

Opportunity Leasing Business SMEs are largest users of lease financing Financial

13 Turkey Energy Efficiency Landscape SMEs Turkey Economy is dominated by SME Energy Intensity Turkey is 5 th highest net importer of natural gas in the World Opportunity Leasing Business SMEs are largest users of lease financing Financial Sector Hesitant to provided Sustainable Energy Financing Have limited access to long-term financing 13

14 How does the leasing model work? Leasing model may reduce the upfront cash burden Lending Model Leasing Model $ $ Leasing model may simplify decision making process 14

IFC and the CTF Energy Efficiency Program in Turkey Commercializing Sustainable Energy Finance CSEF Investments $40 M IFC Funds $20 M IFC Funds $35 M IFC Funds $10 M

15 IFC and the CTF Energy Efficiency Program in Turkey Commercializing Sustainable Energy Finance CSEF Investments $40 M IFC Funds $20 M IFC Funds $35 M IFC Funds $10 M CTF Funds $5 M CTF Funds $5 M CTF Funds Outcomes Over $100 M In loans for Sustainable Energy Projects 56 Sustainable Energy Loans distributed 203,000 MtCO2e mitigated 15

16 Outcomes Impact CSEF Follow up CSEF II: Green Buildings Reducing Level of concessionality with the business model becoming fully commercial Cross-sectoral effect Financing institutions became more focused on EE project lending Opportunity to improve buildings efficiency through green buildings program Advice to government on green building codes and certification system Leverage IFC investment experience 16

17 Thank You! Web: 17

IFC: PROMOTING INCLUSIVE GREEN GROWTH IN THE MIDDLE EAST & NORTH AFRICA (MENA)

IFC: PROMOTING INCLUSIVE GREEN GROWTH IN THE MIDDLE EAST & NORTH AFRICA (MENA) Thomas Jacobs, MENA Climate Anchor & Resident Representative, Lebanon & Syria IFC: Largest development bank focused solely